What is the difference between perpetual crypto futures and traditional futures?

5 answers

• Sigitas PetrauskasSep 07, 2024 · 10 months ago
  Perpetual crypto futures and traditional futures are both derivative contracts that allow traders to speculate on the price movement of an underlying asset. However, there are several key differences between the two. Firstly, perpetual crypto futures do not have an expiration date, while traditional futures contracts have a fixed expiration date. This means that perpetual futures can be held indefinitely, providing traders with more flexibility in their trading strategies. Secondly, perpetual crypto futures use a funding mechanism to maintain the contract's price close to the spot price of the underlying asset. This funding mechanism ensures that the contract's price does not deviate significantly from the spot price, reducing the risk of manipulation. Lastly, perpetual crypto futures typically settle in the native cryptocurrency of the exchange, while traditional futures settle in fiat currency. This allows traders to avoid the hassle of converting between cryptocurrencies and fiat currencies. Overall, perpetual crypto futures offer more flexibility, reduced risk of manipulation, and simplified settlement compared to traditional futures.
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• Hessellund EgelundDec 11, 2022 · 3 years ago
  The main difference between perpetual crypto futures and traditional futures lies in their expiration dates. Traditional futures contracts have a fixed expiration date, while perpetual futures do not. This means that traders can hold perpetual futures for as long as they want, without worrying about contract expiration. Additionally, perpetual futures use a funding mechanism to maintain the contract's price close to the spot price of the underlying asset. This funding mechanism ensures that the contract's price does not deviate significantly from the spot price, providing traders with a fair and transparent trading environment. On the other hand, traditional futures settle in fiat currency, while perpetual futures settle in the native cryptocurrency of the exchange. This difference in settlement currency can affect the trading experience and convenience for traders. Overall, perpetual crypto futures offer more flexibility and a fairer trading environment compared to traditional futures.
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• Hrithik KOct 19, 2024 · 8 months ago
  Perpetual crypto futures and traditional futures have some key differences that traders should be aware of. Perpetual futures do not have an expiration date, which means that traders can hold their positions for as long as they want. This can be advantageous for traders who want to take a long-term view on the market. Traditional futures, on the other hand, have a fixed expiration date, which means that traders need to close their positions before the contract expires. Additionally, perpetual futures use a funding mechanism to maintain the contract's price close to the spot price of the underlying asset. This funding mechanism ensures that the contract's price does not deviate significantly from the spot price, providing traders with a fair and transparent trading environment. Lastly, perpetual futures settle in the native cryptocurrency of the exchange, while traditional futures settle in fiat currency. This difference in settlement currency can affect the trading experience for traders. Overall, perpetual crypto futures offer more flexibility and a fairer trading environment compared to traditional futures.
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• Umang BasuthkarJan 24, 2023 · 2 years ago
  Perpetual crypto futures and traditional futures have some differences that traders should consider. Perpetual futures do not have an expiration date, which means that traders can hold their positions indefinitely. This can be beneficial for traders who want to take a long-term view on the market. Traditional futures, on the other hand, have a fixed expiration date, which means that traders need to close their positions before the contract expires. Additionally, perpetual futures use a funding mechanism to maintain the contract's price close to the spot price of the underlying asset. This funding mechanism ensures that the contract's price does not deviate significantly from the spot price, providing traders with a fair and transparent trading environment. Lastly, perpetual futures settle in the native cryptocurrency of the exchange, while traditional futures settle in fiat currency. This difference in settlement currency can affect the trading experience for traders. Overall, perpetual crypto futures offer more flexibility and a fairer trading environment compared to traditional futures.
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• Hrithik KMay 06, 2021 · 4 years ago
  Perpetual crypto futures and traditional futures have some key differences that traders should be aware of. Perpetual futures do not have an expiration date, which means that traders can hold their positions for as long as they want. This can be advantageous for traders who want to take a long-term view on the market. Traditional futures, on the other hand, have a fixed expiration date, which means that traders need to close their positions before the contract expires. Additionally, perpetual futures use a funding mechanism to maintain the contract's price close to the spot price of the underlying asset. This funding mechanism ensures that the contract's price does not deviate significantly from the spot price, providing traders with a fair and transparent trading environment. Lastly, perpetual futures settle in the native cryptocurrency of the exchange, while traditional futures settle in fiat currency. This difference in settlement currency can affect the trading experience for traders. Overall, perpetual crypto futures offer more flexibility and a fairer trading environment compared to traditional futures.
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